New York: American banking giant Wells Fargo & Co, is likely to shift some of its technology and back-office processing work away from the US, with many of the jobs being transferred to India and the Philippines.
Jobs in Wells Fargo's technology, retirement division and other business lines could shift to India and the Philippines as part of a company wide review, said Bridget Braxton, a spokeswoman for Wells Fargo.
"We are pursuing a strategy for where we grow and where we shift resources over the long term both internationally and domestically," Braxton told Firstpost on Thursday.
"The vast majority of our workforce will continue to be based in the United States," she added. Braxton wouldn't say how many jobs would be moved to India.
Wells Fargo, the 12th largest private US employer, had 265,000 full-time employees at the end of the first quarter. Braxton indicated that Wells Fargo employs 3,000 people in India and another 240 in the Philippines.
In September 2006, Wells Fargo opened a technology development center in Hyderabad. The Indian facility supports Wells Fargo's banking software application development, testing and other tech functions for the bank. It is a key part of Wells Fargo's technology information group in the US.
"Our customers are international and they expect round-the-clock service," said Braxton, while explaining that a global workforce scattered in different time zones could help Wells Fargo better meet the demands of clients worldwide.
According to Reuters, Wells Fargo has said it would consolidate technology units and streamline staff functions as part of an efficiency initiative, called Project Compass.
David Carroll, Wells Fargos' head of wealth management, brokerage and retirement services, told Reuters in February his business was looking at areas where it could use less expensive workers overseas, mostly for back-office processing tasks. Carroll told the news agency that his business has about 35,000 employees, with about 500 in India and Chile.
Wells Fargo has told investors it aims to reduce quarterly expenses by about $1.7 billion to $11.25 billion by the end of this year. Wells Fargo will not be the first US bank to shift technology and processing tasks offshore to save costs.
In 2002, JPMorgan Chase, the second largest US bank, established the India Global Service Center (GSC) to support the bank's businesses around the world. The bank's cost-saving support operations in India have expanded into several facilities in Mumbai, Bangalore and Hyderabad and boast over 10,000 employees. JPMorgan Chase was one of the first banks to transfer not only back-office and call-center operations but also investment banking research functions to India. It also spends up to $300 million on outsourcing work to India's Tata Consultancy Services, Cognizant Technology Solutions and Accenture.
A survey by Forrester Research on the growing trend of outsourcing, predicts that by 2015 a total of 3.4 million previously US-based positions and $136 billion in wages will have been relocated overseas. According to analysts, outsourcing of work to countries like India and the Philippines is a fait accompli in customer service, direct marketing, clinical research and information technology.
Updated Date: Dec 20, 2014 09:33 AM